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A nutrient "trading" program to improve the quality of drinking water in Arkansas could be established within the next two years because of legislation passed in March by the Arkansas Senate and House of Representatives, the executive director of the Beaver Watershed Alliance said Thursday.

Act 335, formerly House Bill 1067, authorized a nutrient-trading program to allow utility plants to rely on cheaper methods of reducing pollution instead of investing in new infrastructure and expensive equipment, said Allan Gates, a lawyer at Mitchell-Williams Law Firm.

"We're deficient in terms of having funds to protect half a million people's drinking water, so nutrient trading really could be a source of funding to help us achieve watershed protection," said John Pennington, the executive director of the Beaver Watershed Alliance.

Pennington was referring to the nearly 500,000 people in Northwest Arkansas who rely on Beaver Lake for drinking water.

The bill was sponsored by Rep. Charlie Collins, R-Fayetteville, and co-sponsored by Rep. Andy Davis, R-Little Rock, will take effect July 22.

Wastewater utility plants contribute to water pollution by discharging nutrients, such as phosphorous, nitrogen and carbon, into waterways. While nutrients are necessary for a healthy aquatic system, in excess, they promote the growth of algae, which contaminates drinking water, Gates said.

"There's no such thing as no impact from a major discharge, no matter what you do, but nutrient water quality trading is a way to ensure that we have a community that has development and clean water," Gates said.

Nutrient-trading programs typically come in three forms. In an offset system, a utility plant with higher treatment costs will pay a plant with lower costs to reduce its nutrient discharge so the two plants collectively discharge less in nutrients.

An exchange program establishes a credit system in which plants struggling to meet compliance standards can purchase credits from others that are under permit limits.

A compliance association provides more flexibility by allowing utility plants to meet a collective pollution standard. If one member exceeds a limit, but the association remains under the collective standard, no sanctions will be enforced.

Arkansas' program could include a combination of those three options, Pennington said.

"Right now it's a blank slate, so everyone has an opportunity to create the best framework and structure possible," he said.

Legislation provides the Arkansas Pollution Control and Ecology Commission within the Arkansas Department of Environmental Quality with the ability to set state water pollution standards and regulate nutrient trades through a nine-member advisory panel, according to House Bill 1067.

The president of the Senate and the speaker of the House of Representatives nominate one member each, and the rest are appointed by the governor. Members are chosen to represent specific interests, such as agriculture, wastewater treatment plants and environmental organizations.

Critics have questioned how the commission would track and monitor trades.

"Nutrient trading is hard to measure, and it's highly variable, but there are some things that require a leap of faith," Gates said.

Membership in the trading organization will likely involve a fee that will pay for trade inspections, Gates said.

Since the bill was passed, the Beaver Watershed Alliance has taken inventory of the watershed to find utility plants that would be interested in participating in a trading program. The organization was formed in 2011 to improve drinking water in Beaver Lake through community outreach, education and scientific evaluation. The group has also submitted a form to sit on the advisory panel as an environmental organization.

"The panel will establish what we want to do, what we can do and what makes sense," Pennington said. "Public input will also have a great impact on what this program ends up being."

Nutrient trading programs exist in Ohio, Indiana, Pennsylvania, Kentucky, Virginia, North Carolina and Maryland, Gates said. The success of nutrient trading in other states has demonstrated that water quality goals can be reached more quickly and efficiently through such programs, according to House Bill 1067.

Jaime Dunaway can be reached by email at

NW News on 05/22/2015

Print Headline: Beaver Watershed prepares program to improve drinking water

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